Uptake of cement in the domestic market increased by 10.9% in May 2017 while exports continue to mar the performance of the cement sector. Cement exports registered a decline of 44.58% in May 2017. This represents the fourth consecutive decline in cement exports, which declined by 45.69 % in February, 60.39% in March and 50.75% in April. These dismal figures has overshadowed the performance of cement in the domestic market.
According to the data released by the All Pakistan Cement Manufacturers Association, cement dispatches to domestic markets during May 2017 were 3.399 million tons compared to 3.065 million tons during the same month last year. This showed a healthy increase of 10.90 % and indicated a continuing growth rate. Exports during May 2017 were 0.309 million tons against 0.558 million tons during May, 2016, showing a reduction of 44.58 percent. Total dispatches during May, 2017 were 3.708 million tons compared to 3.623 million tons during the same month last year, showing an increase of 2.36 percent.
During the period from July 2016 to May 2017 domestic cement consumption has increased by a healthy 10.76 percent to 37.589 million tons against 35.523 million tons for the corresponding period last year. Export of cement during the same period declined by 21.27 percent to only to 4.319 million tons against 5.486 million tons for the corresponding period last year. Cement exports have been on constant decline since 2008-09 when it peaked at 10.8 million tons.
During the month of May 2017, exports to Afghanistan decreased from 0.206 million tons in May 2016 to 0.097 million tons in May 2017 showing a decline of 53.03 percent. Exports to India also registered a decline from 0.135 million tons in May 2016 to 0.114 million tons during the same month this year, showing a decline of 15.22 percent. Exports to India are mainly through Wagah border and the southern coast of India.
A spokesperson for APCMA expressed concern over falling exports to Afghanistan, which have declined by 31.24 percent from July 2016 to May 2017. He said cement exports to India have registered an increase of 34.61 percent in the July 2016 to May 2017 period.
The spokesman APCMA was dismayed at the government slapping undue additional taxes on cement. He said that the increase will hurt the growth of the industry, which has been posting healthy growth for the last 18 months. He added that growth in the industry has already remained subdued during the past two months – 0.70 percent in April and 2.36 percent in May. This decline in overall growth was despite the fact that domestic consumption of cement increased by 23.09 percent in March, 9.53 percent in April and 10.58 percent in May.
Industry experts have appealed to the government to take steps to boost the housing sector as currently the cement industry is mostly depending on infrastructure projects. They said that sustained growth in housing construction is essential to absorb the additional capacities that would be operational in two years. They urged the government to avoid disruptive policies that impact the growth of construction in the country.